The ongoing call by governments to reduce energy consumption is a bone of contention for the energy consumer. But it’s not just homes that are impacted; it’s businesses too. As the requests evolve into full-blown cries for help, trying to secure alternative fuel sources is merely dabbling with short-term solutions to an ongoing problem. The answer? Decarbonization.
If we unpack the true meaning of decarbonization, it is the decreased reliance on, and eventual avoidance of, fossil fuels coupled with digitalization. And in the realm of quantum non-separability, where everything is deemed connected – when we start to unravel decarbonization, we need to create a view of how an effort in one sector benefits another.
An industry-wide approach
While the industry, building, transportation, and energy sectors all have their part to play, let’s look at the building sector, which accounts for 40% of global energy usage. And then the energy grid, which will be at the sharp end of the fact that energy consumption is set to double in the next 20 years and peak demand is expected to triple. Added to this, we must be mindful that there is no definite guide on how much renewable energy we can generate or consume. Factoring this all in, the only way we can transition to a decarbonized urban infrastructure and a decentralized renewable energy system is through digitalization. With a digital solution that can centralize and automate the management of the energy consumption of buildings, grids, and cities, we can create a single truth of the energy being consumed.
Energy consumption is set to double in the next 20 years and peak demand is expected to triple.
The smarter the building, the less energy required
If you consider that buildings account for 40% of global energy usage, a quarter in their construction phase and three-quarters in operation, and our management of these building causes 27% of global carbon emissions – we can immediately assume the sector’s reliance on fossil fuels is a problem.
We need to start architecting sustainable buildings and creating sustainable communities that put energy efficiency first. One way to achieve this is to install Internet of Things (IoT) solutions that gather the data required to build out optimization processes and identify where energy consumption can be curbed. At Siemens, we established that 30-40% of energy could be saved using digital solutions.
“At Siemens, we established that 30-40% of energy could be saved using digital solutions.”
But IoT is just the start. If we are to decarbonize truly, future digital solutions must be able to monitor energy generation and storage, microgrid control, EV charging solutions, and perform holistic asset performance management. The impact of this can be determined through the deployment of a digital twin. And with data, organizations can better deploy analytics and use AI to drive automation.
Breaking down digital perceptions
Digital solutions are pricey. Heard that before? It’s unsurprising if you have, as it’s been one of the biggest challenges facing the digitalization of buildings. That and the skills required to manage them. But technology waits for no one, and advances in sensors, software, and analytics have driven the cost down significantly.
Further, the energy market is following in the footsteps of the tech market, and things are being delivered X-as-a-service (XaaS), namely, pay for what you use. This allows building operators to move building and energy management from CAPEX to OPEX.
Time also waits for no one. The International Energy Agency’s (IEA) “Net Zero by 2050. A Roadmap for the Global Energy Sector” puts the timeline for decarbonization compatible with the Paris Agreement in the buildings sector as such: by 2030 new buildings should be zero-carbon ready, and universal energy access facilitated; by 2035 most appliances and cooling systems sold must be energy efficient; 2040 is the deadline to retrofit 50% of existing buildings to zero-carbon-ready levels, and by 2050 more than 85% of buildings should be zero-carbon-ready.
Inching energy grids towards decarbonization
As for the energy sector, it too faces a real challenge, attempting to address an energy crisis while trying to meet the deadlines of the Paris Agreement. The problem is that we can’t pause demand. For example, suppose by 2035, 60% of car and 50% of heavy truck sales must be electric, this only serves to add to the building sector’s growth mentioned above. In that case, we can estimate that energy capacity requirements will triple.
Unfortunately, while the sources exist, we still waste renewable energy because of legacy grids and volatile supply. The only way to fix this is to transform existing energy grids to accommodate in-feed stochastic renewable energy sources. And again, it’s only something a digital system can achieve as it helps grid operators to create the stability needed from decentralized generation assets. Quick wins in this include grid software solutions that turn the grid into a smart grid and are offered XaaS to keep costs in check.
“The only way to fix this is to transform existing energy grids to accommodate in-feed stochastic renewable energy sources.”
Grid software has a lot to offer, reducing the number of technical skills required, simplifying troubleshooting, decreasing OPEX, and improving grid efficiency through better grid management. For example, it becomes easier to deal with volatility when you have real-time data that can direct and inform decision-making. And with the combination of a digital twin (of the grid), better scenario planning can be achieved for integrating renewable energy resources, regardless of their “source”.
The energy sector is indeed chasing a lofty goal. If it is to be net zero by 2050, we must reduce our reliance on fossil fuels now to enjoy an electricity grid made up of 90% renewables, 70% of which will come from photovoltaics and wind.
It can be done if done digitally
None of this is impossible. Siemens recently worked with IBM to deliver a grid data management system to the Finnish transmission system operator Fingrid. The system performs model management, network analysis and simulation with its digital twin named ELVIS (Electrical Verkko Information System). Integrating multiple IT systems, the digital twin maps, analyzes, and simulates grid behavior in real-time. This provides data that offers insights into how the grid behaves in different situations and guides solutions through scenario planning. It also assists with asset management, which has resulted in savings of tens of millions of Euros.
It’s clear. We must use technology if we are to break free from our reliance on fossil fuels and embrace decarbonization. It will not be cheap or that easy, but it will enable energy transition and speed up the process. And for context, using software, the redevelopment and digitalization of the grid will cost less than the Marshall Plan invested in Europe following World War Two – approximately 2% of U.S. GDP at the time.